Kathy is a 25% partner in the kdp partnership and receives a parcel of land with a fair value of $166,000 (inside basis of $132,000) in complete liquidation of her partnership interest. kathy's outside basis immediately before the distribution is $216,000. kdp currently has a §754 election in effect and has no hot assets or liabilities. what is kdp's special basis adjustment from the distribution? a. $34,000 step up. b. $84,000 step up. c. $84,000 step down. d. $0.

Electronics assembly inc. is a contract manufacturer that assembles consumer electronics for a number of companies. currently, the operations manager is assessing the capacity requirements as input into a bid for a job to assemble cell phones for a major global company. the company would assemble three models of cell phones in the same assembly cell. setup time between the phones is negligible. electronics assembly inc. operates two 8-hour shifts for 275 days per year. cell phone demand forecast (phones/year) processing time (minutes/phone) mars 47,000 19.8 saturn 35,000 20.7 neptune 7,500 16.2 a. calculate total capacity required by line. b. determine the total operating time available. c. calculate the total number of assembly cells. (round up your answer to the next whole number.)

Suppose that jim plans to borrow money for an education at texas a& m university. jim will need to borrow $25,000 at the end of each year for the next five years (total=$125,000). jim wishes his parents could pay for his education but they can’t. at least, he qualifies for government loans with a reduced interest rate while he is in school. he has a special arrangement with aggiebank to lend him the money at a subsidized rate of 1% over five years without having to make a payment until the end of the fifth year. however, at the end of the fifth year, jim agrees to pay off the loan by borrowing from longhorn bank. longhorn bank will lend him the money he needs at an annual interest rate of 6%. jim agrees to pay back the longhorn bank with 20 annual payments and the payments will be uniform (equal annual payments including principal and interest). (i) calculate how much money jim has to borrow at the end of 5 years to pay off the loan with aggiebank. a. $121,336 b. $127,525 c. $125,000 d. $102,020 e. none of the above

Examine the following book-value balance sheet for university products inc. the preferred stock currently sells for $30 per share and pays a dividend of $3 a share. the common stock sells for $16 per share and has a beta of 0.9. there are 2 million common shares outstanding. the market risk premium is 9%, the risk-free rate is 5%, and the firm’s tax rate is 40%. book-value balance sheet (figures in $ millions) assets liabilities and net worth cash and short-term securities $ 2.0 bonds, coupon = 6%, paid annually (maturity = 10 years, current yield to maturity = 8%) $ 5.0 accounts receivable 3.0 preferred stock (par value $15 per share) 3.0 inventories 7.0 common stock (par value $0.20) 0.4 plant and equipment 21.0 additional paid-in stockholders’ equity 13.6 retained earnings 11.0 total $ 33.0 total $ 33.0 a. what is the market debt-to-value ratio of the firm? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.) b. what is university’s wacc? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.)